Exhibit 10.2
EMPLOYMENT AGREEMENT
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THIS AGREEMENT ("Agreement"), dated as of July 1, 2004,
between THE XXXXX XXXXXX COMPANIES INC., a Delaware corporation (the "Company"),
and XXXXXX X. XXXXXXX, a resident of Xxxxxx, New Jersey (the "Executive" or
"you").
W I T N E S S E T H:
WHEREAS, the Company and its subsidiaries are principally
engaged in the business of manufacturing, marketing and selling skin care,
makeup, fragrance and hair care products and related services (the "Business");
and
WHEREAS, the Company desires to continue to retain the
services of the Executive as Group President until December 31, 2004 and as
Chief Operating Officer for the remainder of the Term of Employment (as defined
below); and
WHEREAS, the Compensation Committee of the Board of
Directors of the Company (the "Compensation Committee") and the Stock Plan
Subcommittee of the Compensation Committee have approved the terms of this
Agreement;
NOW, THEREFORE, in consideration of the foregoing and of
the mutual covenants and obligations hereinafter set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Employment Term.
The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to enter into employment, as Group President of the
Company for the period commencing on July 1, 2004 and ending December 31, 2004
and Chief Operating Officer of the Company for a period commencing January 1,
2005 and ending June 30, 2007 unless terminated sooner pursuant to Section 6
hereof (the "Term of Employment"). The twelve-month period commencing on July 1,
2004 shall be the "First Contract Year" hereunder, and subsequent twelve-month
periods shall be subsequent Contract Years.
2. Duties and Extent of Services.
(a) During the period ending December 31, 2004, the
Executive shall serve as Group President of the Company, and, in such
capacity, he shall serve as the senior-most executive responsible for one or
more of the Company's brands and/or business units as he may be assigned from
time to time. For the remainder of the Term of Employment, the Executive shall
serve as Chief Operating Officer of the Company and In such capacity, he shall
render such executive, managerial, administrative and other services as
customarily are associated with and incident to such positions, and as the
Company may, from time to time, reasonably require of him consistent with such
positions.
(b) The Executive shall also hold such other positions and
executive offices of the Company and/or of any of the Company's
subsidiaries or affiliates as may from time to time be agreed by the Executive
or assigned by the President and Chief Executive Officer of the Company, the
Chairman of the Board of Directors of the Company or the Board of Directors of
the Company, provided that each such position shall be commensurate with the
Executive's standing in the business community as Group President or Chief
Operating Officer, as the case may be. The Executive shall not be entitled to
any compensation other than the compensation provided for herein for serving
during the Term of Employment in any other office or position of the Company or
any of its subsidiaries or affiliates, unless the Board of Directors of the
Company or the appropriate committee thereof shall specifically approve such
additional compensation.
(c) The Executive shall be a full-time employee of the
Company and shall exclusively devote all his business time and efforts
faithfully and competently to the Company and shall diligently perform to the
best of his ability all of the duties required of him as Group President or
Chief Operating Officer, and in the other positions or offices of the Company or
its subsidiaries or affiliates assigned to him hereunder. Notwithstanding the
foregoing provisions of this section, the Executive may serve as a
non-management director of such business corporations (or in a like capacity in
other for-profit or not-for-profit organizations) as the Board of Directors,
Chairman of the Board or President and Chief Executive Officer of the Company
may approve, such approval not to be unreasonably withheld.
3. (a) Base Salary. As compensation for all services to be
rendered pursuant to this Agreement and as payment for the rights
and interests granted by Executive hereunder, the Company shall pay or cause any
of its subsidiaries to pay the Executive a base salary of (i) $83,333.33 per
month (which equates to $1,000,000 per annum) for the six month period ending
December 31, 2004, and (ii) $104,166.67 per month (which equates to $1,250,000
per annum) for the six month period ending June 30, 2005 and for the Second and
Third Contract Years (the "Base Salary"). All amounts of Base Salary provided
for hereunder shall be payable in accordance with the regular payroll policies
of the Company in effect from time to time.
(b) Incentive Bonus Compensation. The Compensation
Committee has established for the Executive annual opportunities under the
Company's Executive Annual Incentive Plan or any subsequent Bonus Plan for
executives that is approved by the stockholders of the Company (the "Bonus
Plan") with aggregate target payouts of $1,750,000 in respect of the First
Contract Year, $1,900,000 in respect of the Second Contract Year and $2,000,000
in respect of the Third Contract Year, subject to the terms and conditions of
the Bonus Plan, which are incorporated herein by reference.
(c) Deferral. The Executive may elect to defer payment of
all or any part of his incentive bonus compensation payable in accordance with
Section 3(b) hereof in respect of any Contract Year during the Term of
Employment, by giving to the Company written notice thereof, on or before
December 31 of such Contract Year or part year (or such earlier date as may be
necessary to comply with the applicable tax laws and regulations). Additionally,
in the event that in respect of any fiscal year of the Company any amount of
Base Salary, any amount payable under the Incentive Bonus Plan or any other
amount payable to the Executive hereunder or otherwise shall, either alone or in
combination with other amounts payable hereunder or otherwise, result in the
payment by the Company of any amount that shall not be currently deductible by
it pursuant to the provisions of Section 162(m) of the Internal Revenue Code, as
amended (the "Code"), or like or successor provisions (a "Non-Deductible
Amount"), the Company may elect to defer the payment of the Non-Deductible
Amount. Any amounts so deferred, either by election of the Executive or by
election of the Company, shall be credited to a bookkeeping account in the name
of the Executive as of the date scheduled for payment hereunder. Such amounts
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shall be credited with interest as of each June 30 during the term of deferral,
compounded annually, at a rate per annum equal to the annual rate of interest
announced by Citibank N.A. in New York, New York as its base rate in effect on
such June 30, but in no event shall such rate exceed 9%. The amounts credited to
such bookkeeping account on or prior to December 31, 2004 and interest credited
thereon shall be paid to the Executive (subject to all applicable withholding
taxes) on a date to be chosen by the Company, but in no event later than ninety
(90) days after the termination of the Executive's employment with the Company,
unless the Executive requests prior to termination of his employment from the
Company to continue the deferral of such payments until a later date and the
Company agrees to such request. The amounts credited to the Deferred
Compensation Account after December 31, 2004 and interest credited thereon shall
be paid to the Executive (or to the Executive's designated beneficiary in the
event of his death) on, or as soon as practicable after, the date that is six
(6) months after the termination of the Executive's employment with the Company.
The Company, in its sole discretion, may provide an investment facility for all
or a portion of such deferred amounts, but shall not be required to do so.
4. (a) Stock Options. The Stock Plan Subcommittee of the
Compensation Committee has approved the grant to the Executive of
options to purchase no fewer than 100,000 shares of the Company's Class A Common
Stock ("Stock Options") under the Fiscal 2002 Share Incentive Plan (the "Share
Incentive Plan") in respect of the First Contract Year. Such grant shall be made
at such time during the Contract Year determined by Stock Plan Subcommittee. The
option grant is subject to the terms and conditions of the Share Incentive Plan
(or applicable successor plan), which are incorporated herein by reference. The
terms of the options shall be set forth in a separate grant letter approved by
the Compensation Committee or the Stock Plan Subcommittee of the Compensation
Committee.
(b) Equity-Based Compensation. In respect of the Second and
Third Contract Years, the Company shall recommend to the Stock Plan
Subcommittee of the Compensation Committee of the Board of Directors that the
Executive be awarded under the terms and conditions of the Fiscal 2002 Share
Incentive Plan or successor plan (which are incorporated herein by reference)
and subject to the provisions of Section 6(i) below, Equity-Based Compensation
awards in accordance with the policies and procedures of the Company as in
effect from time to time for its Executive Officers. The terms of such
Equity-Based Compensation awards shall be set forth in a separate grant letter
approved by the Stock Plan Subcommittee of the Compensation Committee of the
Board of Directors. The recommended equity-based compensation awards shall be of
an equivalent value to a grant of stock option with respect to 200,000 shares of
the Company's Class A Common Stock determined in accordance with procedures
generally utilized by the Company for its financial reporting at the time of
grant.
(c) Certain Conditions. Executive acknowledges and agrees
that any grant of Stock Options or other Equity-Based Compensation otherwise
provided for in this Section 4 shall be effective as provided herein only to the
extent permitted by the Share Incentive Plan, and this Agreement shall not
obligate the Company to adopt any successor plan providing for the grant of
Stock Options (or other Equity-Based Compensation).
5. Benefits.
(a) Standard Benefits. During the Term of Employment, the
Executive shall be entitled to (i) participate in any and all benefit programs
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and arrangements now in effect and hereinafter adopted and made generally
available by the Company to its senior officers, including but not limited to
the Xxxxx Xxxxxx Companies 401(k) Savings Plan (the "401(k) Savings Plan"), the
Xxxxx Xxxxxx Companies Retirement Growth Account Plan (the "Qualified Plan"),
the related Xxxxx Xxxxxx Inc. Benefit Restoration Plan (the "Non-Qualified
Plan"), contributory and non-contributory Company welfare and benefit plans,
disability plans, and medical, death benefit and life insurance plans for which
the Executive shall be eligible, or may become eligible during the Term of
Employment; (ii) participate in the Company's automobile program now in effect
and hereinafter adopted and generally made available by the Company to its
senior officers officers and, in accordance with such program, may elect to be
provided with an automobile having an acquisition value of up to $50,000; and
(iii) paid vacations during each year of the Term of Employment in accordance
with the policies and procedures of the Company as in effect from time to time
for its senior officers.
(b) Perquisite Reimbursement; Financial Counseling. The
Company shall reimburse the Executive the actual expense incurred by him in
connection with his professional standing, in accordance with the guidelines set
out in the Company's executive perquisite program. In no event shall the gross
amount of such reimbursements be greater than $15,000 in respect of any fiscal
year during the Term of Employment. Additionally, the Executive will reimburse
the Executive for up to $5,000.00 per year in financial counseling services. The
Executive acknowledges that participation in such programs will result in the
receipt by him of additional taxable income.
(c) Expenses. The Company agrees to reimburse the Executive
for all reasonable and necessary travel (including first class air fare),
business entertainment and other business out-of-pocket expenses incurred or
expended by him in connection with the performance of his duties hereunder upon
presentation of proper expense statements or vouchers or such other supporting
information as the Company may reasonably require of the Executive.
(d) Spousal Travel. The Executive may upon prior approval
of the President and Chief Executive Officer or his designee arrange for his
spouse to accompany him on business related travel itineraries, on a reasonable
basis, at Company expense.
(e) Executive Term Life Insurance. During the Term of
Employment, the Company shall continue to pay premiums on the existing term life
insurance policy.
6. Termination.
(a) Permanent Disability. In the event of the "permanent
disability" (as hereinafter defined) of the Executive during the Term of
Employment, the Company shall have the right, upon written notice to the
Executive, to terminate the Executive's employment hereunder, effective upon the
giving of such notice (or such later date as shall be specified in such notice).
In the event of such termination, the Company shall have no further obligations
hereunder, except that the Executive shall be entitled (i) to receive any
amounts or benefits to which the Executive may otherwise have been entitled
prior to the effective date of termination; (ii) to be paid his Base Salary
under Section 3(a) hereof for a period of one (1) year from the effective date
of termination; provided, however, that the Company shall only be required to
pay that amount of the Executive's Base Salary which shall not be covered by
pension benefits or long-term disability payments, if any, to the Executive
under any Company plan or arrangement and (iii) to receive a pro-rata portion of
the annual bonus that the Executive would have been entitled to receive had he
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remained in employment through the end of the Contract Year during which the
termination due to permanent disability occurred. In addition, upon termination
for permanent disability, the Executive shall continue to participate in any and
all pension, insurance and other benefit plans and programs of the Company
during the period the Executive is continuing to receive his Base Salary in
accordance with this Section 6(a). Thereafter, the Executive's rights to
participate in such programs and plans, or to receive similar coverage, if any,
shall be as determined under such programs; provided, however, that, except as
otherwise provided in this Section 6(a), the Company will have no further
obligations under Sections 3(b) and 4 hereof. For purposes of this Section 6(a),
"permanent disability" means any disability as defined under the Company's
applicable disability insurance policy or, if no such policy is available, any
physical or mental disability or incapacity that renders the Executive incapable
of performing the services required of him in accordance with his obligations
under Section 2 hereof for a period of six (6) consecutive months or for shorter
periods aggregating six (6) months during any twelve-month period.
(b) Death. In the event of the death of the Executive
during the Term of Employment, this Agreement shall automatically terminate. In
the event of such termination the Company shall have no further obligations
hereunder, except to pay, for a period of one (1) year from the date of his
death, the Executive's beneficiary or legal representative (i) the Executive's
Base Salary as established under Section 3(a) hereof as of the date of his
death; (ii) (A) bonus compensation earned but not paid under Section 3(b) hereof
that relates to any Contract Year ending prior to the date of his death and (B)
a one-time payment equal to fifty percent (50%) of the average of actual annual
bonuses paid or payable during the Term of Employment in accordance with Section
3(b) hereof, except that if the Executive dies during the First Contract Year,
the sum of $875,000; and (iii) any other amounts to which the Executive
otherwise would have been entitled to hereunder prior to the date of his death;
provided, however, that, except as otherwise provided in this Section 6(b), the
Company will have no further obligations under Sections 3(b) and 4 hereof.
(c) Termination Without Cause. The Company shall have the
right, upon one hundred eighty (180) days' prior written notice given to the
Executive, to terminate the Executive's employment for any reason whatsoever. In
the event of such termination, for a period ending on the latest to occur of (x)
a date one (1) year from the effective date of termination, (y) June 30, 2007,
or (z) the conclusion of a severance period consistent with Company policy
(which in no event will exceed two years), the Executive shall be entitled as
damages to (i) receive his Base Salary as established under Section 3(a) hereof;
and (ii) participate in all pension, insurance and other benefit plans, programs
or arrangements, on terms identical to those applicable to full-term senior
officers of the Company. In addition, he shall receive a one-time payment equal
to fifty percent (50%) of the average of actual annual bonuses paid or payable
to the Executive during the Term of Employment in accordance with Section 3(b)
hereof, or, if such termination occurs prior to the payment of any bonus
hereunder, the sum of $875,000. Except as otherwise provided in this Section
6(c), the Company will have no further obligations under Sections 3(b) and 4
hereof. In the event of termination pursuant to this Section 6(c), the Executive
shall not be required to mitigate his damages hereunder.
(d) Cause. The Company shall have the right, upon written
notice to the Executive, to terminate the Executive's employment under this
Agreement for "Cause" (as hereinafter defined), effective upon the giving of
such notice (or such later date as shall be specified in such notice), and the
Company shall have no further obligations hereunder, except to pay the Executive
any amounts otherwise payable pursuant to Section 3 hereof and provide the
Executive any benefits to which the Executive may have been otherwise entitled
prorated to the effective date of termination. The Executive's right to
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participate in any of the Company's retirement, insurance and other benefit
plans and programs shall be as determined under such programs and plans;
provided, however, that, except as otherwise provided in this Section 6(d), the
Company will have no further obligations under Sections 3(b) and 4 hereof.
For purposes of this Agreement, "Cause" means:
(i) a material breach of, or the willful failure
or refusal by the Executive to perform and discharge duties or obligations he
has agreed to perform or assume under this Agreement (other than by reason of
disability or death) that, if capable of correction, is not corrected within ten
(10) business days following notice thereof to the Executive by the Company,
such notice to state with specificity the nature of the breach, failure or
refusal;
(ii) willful misconduct by the Executive,
unrelated to the Company or any of its subsidiaries or affiliates, that could
reasonably be anticipated to have an adverse effect on the Company or any of its
subsidiaries or affiliates;
(iii) the Executive's gross negligence, whether
related or unrelated to the business of the Company or any of its subsidiaries
or affiliates which could reasonably be anticipated to have an adverse effect on
the Company or any of its subsidiaries or affiliates that, if capable of
correction, is not corrected within ten (10) business days following notice
thereof to the Executive by the Company, such notice to state with specificity
the nature of the conduct complained of;
(iv) the Executive's failure to follow a lawful
directive of the chief Executive Officer of the Company that is within the scope
of the Executive's duties for a period of ten (10) business days after notice
from the Chief Executive Officer specifying the performance required;
(v) any violation by the Executive of a policy
contained in the Code of Conduct of the Company; or
(vi) drug or alcohol abuse by the Executive that
materially affects the Executive's performance of his duties under this
Agreement.
(e) Termination by Executive. The Executive shall have the
right, exercisable at any time during the Term of Employment, to terminate his
employment for any reason whatsoever, upon six (6) months' prior written notice
to the Company. Upon such termination, the Company shall have no further
obligations hereunder other than to pay the executive his accrued benefits
through the date of such termination and to pay his salary for a period of
one-year following termination (or such longer period which is consistent with
Company policy for severance (which in no event will exceed two years)).
(f) Release of Claims. As a condition precedent to the
receipt of certain payments and benefits pursuant to Section 6, the Executive,
or, in the case of his death or Disability that prevents the Executive from
performing his obligation under this Section 6(f), his personal representative,
and his beneficiary, if applicable, will execute an effective general release of
claims against the Company and its subsidiaries and affiliates and their
respective directors, officers, employees, attorneys and agents; provided,
however, that such release will not affect any right that the Executive, or in
the event of his death, his personal representative or beneficiary, otherwise
has to any payment or benefit provided for in this Agreement or to any vested
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benefits the Executive may have in any employee benefit plan of Company or any
of its subsidiaries or affiliates, or any right the Executive has under any
other agreement between the Executive and the Company or any of its subsidiaries
or affiliates that expressly states that the right survives the termination of
the Executive's employment.
(g) Certain Limitations. Notwithstanding anything to the
contrary contained herein, in the event that any payment received or to be
received by the Executive pursuant to Section 6 hereof or otherwise (a
"Severance Payment") would be subject to the excise tax (the "Excise Tax")
imposed by Section 4999 of the Code (in whole or part), the Severance Payment
shall be reduced (but not below zero) until no portion of such payments would be
subject to Excise Tax.
(h) Non-Renewal. In the event the Company does not offer
the Executive the renewal of the Term of Employment on the basis of terms no
less favorable than those pending at the time of the conclusion of the Term, the
Executive shall be entitled to a severance arrangement providing Base Salary and
continuation of certain benefits for a the greater of one year or such period
consistent with Company policy at that time (which in no event will exceed two
years).
(i) Effect of Termination. Upon the termination of the
Executive's employment hereunder for any reason, the Company shall have no
further obligations hereunder, except as otherwise provided herein. The
Executive, however, shall continue to have the obligations provided for in
Sections 7 and 8 hereof. Furthermore, upon such termination, the Executive shall
be deemed to have resigned immediately from all offices and directorships held
by him in the Company or any of its subsidiaries.
7. Confidentiality; Ownership.
(a) The Executive agrees that he shall forever keep secret
and retain in strictest confidence and not divulge, disclose, discuss, copy or
otherwise use or suffer to be used in any manner, except in connection with the
Business of the Company, its subsidiaries or affiliates and any other business
or proposed business of the Company or any of its subsidiaries or affiliates,
any "Protected Information" in any "Unauthorized" manner or for any
"Unauthorized" purpose (as such terms are hereinafter defined).
(i) "Protected Information" means trade secrets,
confidential or proprietary information and all other knowledge, know-how,
information, documents or materials owned, developed or possessed by the Company
or any of its subsidiaries or affiliates, whether in tangible or intangible
form, pertaining to the Business or any other business or proposed business of
the Company or any of its subsidiaries or affiliates, including, but not limited
to, research and development, operations, systems, data bases, computer programs
and software, designs, models, operating procedures, knowledge of the
organization, products (including prices, costs, sales or content), processes,
formulas, techniques, machinery, contracts, financial information or measures,
business methods, business plans, details of consultant contracts, new personnel
hiring plans, business acquisition plans, customer lists, business relationships
and other information owned, developed or possessed by the Company or its
subsidiaries or affiliates; provided that Protected Information shall not
include information that becomes generally known to the public or the trade
without violation of this Section 7.
(ii) "Unauthorized" means: (A) in contravention
of the policies or procedures of the Company or any of its subsidiaries or
affiliates; (B) otherwise inconsistent with the measures taken by the Company or
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any of its subsidiaries or affiliates to protect their interests in any
Protected Information; (C) in contravention of any lawful instruction or
directive, either written or oral, of an employee of the Company or any of its
subsidiaries or affiliates empowered to issue such instruction or directive; or
(D) in contravention of any duty existing under law or contract. Notwithstanding
anything to the contrary contained in this Section 7, the Executive may disclose
any Protected Information to the extent required by court order or decree or by
the rules and regulations of a governmental agency or as otherwise required by
law or to his legal counsel and, in connection with a determination under
Section 6(h), to accounting experts; provided that the Executive shall provide
the Company with prompt notice of such required disclosure in advance thereof so
that the Company may seek an appropriate protective order in respect of such
required disclosure.
(b) The Executive acknowledges that all developments,
including, without limitation, inventions (patentable or otherwise),
discoveries, formulas, improvements, patents, trade secrets, designs, reports,
computer software, flow charts and diagrams, procedures, data, documentation,
ideas and writings and applications thereof relating to the Business or any
business or planned business of the Company or any of its subsidiaries or
affiliates that, alone or jointly with others, the Executive may conceive,
create, make, develop, reduce to practice or acquire during the Term of
Employment (collectively, the "Developments") are works made for hire and shall
remain the sole and exclusive property of the Company. The Executive hereby
assigns to the Company, in consideration of the payments set forth in Section
3(a) hereof, all of his right, title and interest in and to all such
Developments. The Executive shall promptly and fully disclose all future
material Developments to the Board of Directors of the Company and, at any time
upon request and at the expense of the Company, shall execute, acknowledge and
deliver to the Company all instruments that the Company shall prepare, give
evidence and take all other actions that are necessary or desirable in the
reasonable opinion of the Company to enable the Company to file and prosecute
applications for and to acquire, maintain and enforce all letters patent and
trademark registrations or copyrights covering the Developments in all countries
in which the same are deemed necessary by the Company. All memoranda, notes,
lists, drawings, records, files, computer tapes, programs, software, source and
programming narratives and other documentation (and all copies thereof) made or
compiled by the Executive or made available to the Executive concerning the
Developments or otherwise concerning the Business or planned business of the
Company or any of its subsidiaries or affiliates shall be the property of the
Company or such subsidiaries or affiliates and shall be delivered to the Company
or such subsidiaries or affiliates promptly upon the expiration or termination
of the Term of Employment.
(c) The provisions of this Section 7 shall, without any
limitation as to time, survive the expiration or termination of the Executive's
employment hereunder, irrespective of the reason for any termination.
8. Covenant Not to Compete. Subject to the last sentence of
this Section 8, the Executive agrees that during the Term of Employment and for
a period of two (2) years commencing upon the expiration or termination of the
Executive's employment hereunder (the "Non-Compete Period"), the Executive shall
not, directly or indirectly, without the prior written consent of the Company:
(a) solicit, entice, persuade or induce any employee,
consultant, agent or independent contractor of the Company or of any of its
subsidiaries or affiliates to terminate his, her or its employment with the
Company or such subsidiary or affiliate, to become employed by any person, firm
or corporation other than the Company or such subsidiary or affiliate or
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approach any such employee, consultant, agent or independent contractor for any
of the foregoing purposes, or authorize or assist in the taking of any such
actions by any third party (for purposes of this Section 8 (a), the terms
"employee," "consultant," "agent" and "independent contractor" shall include any
persons with such status at any time during the six (6) months preceding any
solicitation in question); or
(b) directly or indirectly engage, participate, or make any
financial investment in, or become employed by or render consulting, advisory or
other services to or for any person, firm, corporation or other business
enterprise, wherever located, which is engaged, directly or indirectly, in
competition with the Business or any business of the Company or any of its
subsidiaries or affiliates as conducted or any business proposed to be conducted
at the time of the expiration or termination of the Executive's employment
hereunder; provided, however, that nothing in this Section 8(b) shall be
construed to preclude the Executive from making any investments in the
securities of any business enterprise whether or not engaged in competition with
the Company or any of its subsidiaries or affiliates, to the extent that such
securities are actively traded on a national securities exchange or in the
over-the-counter market in the United States or on any foreign securities
exchange and represent, at the time of acquisition, not more than 3% of the
aggregate voting power of such business enterprise.
Notwithstanding the foregoing, the Executive shall not be
subject to the terms and provisions of paragraph (b) of this Section 8 if the
Term of Employment is terminated pursuant to Section 6(c) or 6(f) hereof.
9. Specific Performance. The Executive acknowledges that
the services to be rendered by the Executive are of a special, unique and
extraordinary character and, in connection with such services, the Executive
will have access to confidential information vital to the Company's Business and
the other current or planned businesses of it and its subsidiaries and
affiliates. By reason of this, the Executive consents and agrees that if the
Executive violates any of the provisions of Sections 7 or 8 hereof, the Company
and its subsidiaries and affiliates would sustain irreparable injury and that
monetary damages would not provide adequate remedy to the Company and that the
Company shall be entitled to have Section 7 or 8 hereof specifically enforced by
any court having equity jurisdiction. Nothing contained herein shall be
construed as prohibiting the Company or any of its subsidiaries or affiliates
from pursuing any other remedies available to it or them for such breach or
threatened breach, including the recovery of damages from the Executive.
10. Deductions and Withholding. The Executive agrees that
the Company or its subsidiaries or affiliates, as applicable, shall withhold
from any and all compensation paid to and required to be paid to the Executive
pursuant to this Agreement, all Federal, state, local and/or other taxes which
the Company determines are required to be withheld in accordance with applicable
statutes or regulations from time to time in effect and all amounts required to
be deducted in respect of the Executive's coverage under applicable employee
benefit plans. For purposes of this Agreement and calculations hereunder, all
such deductions and withholdings shall be deemed to have been paid to and
received by the Executive.
11. Entire Agreement. Except for the Fiscal 2002 Share
Incentive Plan, the Executive's outstanding stock option agreements, the
Executive Annual Incentive Plan, the Thrift Plan, the term life insurance
arrangement between the Company and the Executive, the Qualified Plan and the
Non-Qualified Plan and applicable successor plans or agreements, this Agreement
embodies the entire agreement of the parties with respect to the Executive's
employment, compensation, perquisites and related items and supersedes any other
prior oral or written agreements, arrangements or understandings between the
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Executive and the Company or any of its subsidiaries or affiliates, and any such
prior agreements, arrangements or understandings are hereby terminated and of no
further effect. This Agreement may not be changed or terminated orally but only
by an agreement in writing signed by the parties hereto.
12. Waiver. The waiver by the Company of a breach of any
provision of this Agreement by the Executive shall not operate or be construed
as a waiver of any subsequent breach by him. The waiver by the Executive of a
breach of any provision of this Agreement by the Company shall not operate or be
construed as a waiver of any subsequent breach by the Company.
13. Governing Law; Jurisdiction.
(a) This Agreement shall be subject to, and governed by,
the laws of the State of New York applicable to contracts made and to be
performed therein.
(b) Any action to enforce any of the provisions of this
Agreement shall be brought in a court of the State of New York located in the
Borough of Manhattan of the City of New York or in a Federal court located
within the Southern District of New York. The parties consent to the
jurisdiction of such courts and to the service of process in any manner provided
by New York law. Each party irrevocably waives any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
brought in such court and any claim that such suit, action or proceeding brought
in such court has been brought in an inconvenient forum and agrees that service
of process in accordance with the foregoing sentences shall be deemed in every
respect effective and valid personal service of process upon such party.
14. Assignability. The obligations of the Executive may not
be delegated and, except with respect to the designation of beneficiaries in
connection with any of the benefits payable to the Executive hereunder, the
Executive may not, without the Company's written consent thereto, assign,
transfer, convey, pledge, encumber, hypothecate or otherwise dispose of this
Agreement or any interest herein. Any such attempted delegation or disposition
shall be null and void and without effect. The Company and the Executive agree
that this Agreement and all of the Company's rights and obligations hereunder
may be assigned or transferred by the Company to and shall be assumed by and be
binding upon any successor to the Company. The Company shall require any
successor by an agreement in form and substance satisfactory to the Executive,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent as the Company would be required to perform if no such
succession had taken place. The term "successor" means, with respect to the
Company or any of its subsidiaries, any corporation or other business entity
which, by merger, consolidation, purchase of the assets or otherwise acquires
all or a majority of the operating assets or business of the Company.
15. Severability. If any provision of this Agreement or any
part thereof, including, without limitation, Sections 7 and 8 hereof, as applied
to either party or to any circumstances shall be adjudged by a court of
competent jurisdiction to be void or unenforceable, the same shall in no way
affect any other provision of this Agreement or remaining part thereof, or the
validity or enforceability of this Agreement, which shall be given full effect
without regard to the invalid or unenforceable part thereof.
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If any court construes any of the provisions of Section 7
or 8 hereof, or any part thereof, to be unreasonable because of the duration
of such provision or the geographic scope thereof, such court may reduce the
duration or restrict or redefine the geographic scope of such provision and
enforce such provision as so reduced, restricted or redefined.
16. Notices. All notices to the Company or the Executive
permitted or required hereunder shall be in writing and shall be delivered
personally, by telecopier or by courier service providing for next-day delivery
or sent by registered or certified mail, return receipt requested, to the
following addresses:
The Company:
The Xxxxx Xxxxxx Companies Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
The Executive:
Xxxxxx X. Xxxxxxx
c/o The Xxxxx Xxxxxx Companies Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (212) 572-
Fax: (212) 572-
Either party may change the address to which notices shall be sent by sending
written notice of such change of address to the other party. Any such notice
shall be deemed given, if delivered personally, upon receipt; if telecopied,
when telecopied; if sent by courier service providing for next-day delivery, the
next business day following deposit with such courier service; and if sent by
certified or registered mail, three days after deposit (postage prepaid) with
the U.S. mail service.
17. No Conflicts. The Executive hereby represents and
warrants to the Company that his execution, delivery and performance of this
Agreement and any other agreement to be delivered pursuant to this Agreement
will not (i) require the consent, approval or action of any other person or (ii)
violate, conflict with or result in the breach of any of the terms of, or
constitute (or with notice or lapse of time or both, constitute) a default
under, any agreement, arrangement or understanding with respect to the
Executive's employment to which the Executive is a party or by which the
Executive is bound or subject. The Executive hereby agrees to indemnify and hold
harmless the Company and its directors, officers, employees, agents,
representatives and affiliates (and such affiliates' directors, officers,
employees, agents and representatives) from and against any and all losses,
liabilities or claims (including interest, penalties and reasonable attorneys'
fees, disbursements and related charges) based upon or arising out of the
Executive's breach of any of the foregoing representations and warranties.
18. Paragraph Headings. The paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
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19. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the date first written above.
THE XXXXX XXXXXX COMPANIES INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President,
Global Human Resources
/s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxx X. Xxxxxxx
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